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Thursday, May 31, 2007

Bright Forecast for Ukraine's GDP

Ukraine's GDP may double by the end of 2010, to $200 billion, which will help boost financial markets, says Dmytro Isupov, managing director of Dragon Assets Management (Kiev).

According to him, an important factor influencing economic development will be hosting the EURO-2012 in Ukraine. The investments for the event may reach USD15-25 billion, which may result in hryvnia revaluation in the mid-term.

"Probably, the NBU will will prevent the hryvnia's rate from strengthening trough market interventions. After that, the NBU will have to fix the official exchange rate, which, in the mid-term, may be UAH 4.8/$1"

According to him, hosting EURO-2012 may cause a considerable increase in metallurgical and engineering industry share prices, as well as the appearance of new portfolio investors in the country.

According to the state statistics committee, Ukraine's real GDP grew by 7.6% in April 2007 year-on-year. In January through April 2007, GDP growth fell to 7.9% year-on-year, compared to 8% in January through March.

Ukraine's real GDP grew by 7.1% in 2006, while in 2005 the growth was 2.7%. Ukraine's government forecasts that GDP growth will slow to 6.5% in 2007.

According to the principles of Ukraine's money and credit policy for 2007, the exchange rate is expected to by UAH 4.95-5.25/$1 in 2007.